How Chile’s mining industry impacts historical copper prices

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Operational restrictions facing some copper mines in Chile have been influencing the metal’s record high price, which reached US$5.02 per pound this week, along with growing demand and limited supply.

While the upward trend is also related to current factors, such as the trade agreement between the United States and China and the Federal Reserve’s rates, the situation of the world’s largest copper producer is putting pressure on the market.

Mining giants such as Codelco, Anglo American, Glencore, and Teck Resources are facing declining production and limitations in their projects and operations, increasing expectations of reduced capacity to meet rising market demands.

Chilean state-owned firm Codelco has reported production losses this year due to the fatal accident at its El Teniente division in July, equivalent to a loss of 48,000 tons of copper. As a result, it has lowered its 2025 production forecast to 1.37 million tons (Mt), down from the previous 1.40Mt.

Canadian Teck is facing operational challenges at its Quebrada Blanca (QB) mine, particularly in the tailings area, which has led to downtime at its concentrator to control the rising material. In the third quarter (Q3), QB produced 39,600 t of fine copper, compared to 52,500 t in the same period of 2024.

For this year, Teck expects between 170,000 and 190,000 tons, lower than the 208,000 t achieved in 2024.

Glencore is also experiencing a period of contraction. At its copper units in South America – which include its stakes in Collahuasi and Lomas Bayas – production fell 16% year-on-year to 134,100t in Q3, primarily affected by lower ore grades at Collahuasi and shortages of acid and water at Lomas Bayas.

Anglo American faces a similar situation. In 2024, its copper production at Los Bronces fell 20% to 172,400 t due to lower ore grades, increased ore hardness, and the closure of a processing plant.

In Q3, it produced 100,200t of copper in Chile, 11% less year-on-year across Los Bronces, El Soldado and its stake in Collahuasi. (Anglo and Glencore each hold a 44% stake in this latter operation, while the remaining 12% is held by a consortium led by Mitsui).

Although a rebound is expected at Collahuasi and Los Bronces from 2027 onwards and all copper units have expansion plans, the market perception is that Chilean production, which has been stagnant at around 5.5Mt for 20 years, faces difficulties in meeting demand.

International market

At a global level, the accidents recorded this year at the Kamoa-Kakula copper complex (Republic of Congo) and in Grasberg (Indonesia) also have an impact.

“A loss of more than half a million tons is expected between this year and 2026. This changes the global supply and demand balance from a market with a slight surplus to one with a significant deficit,” Braim Chiple, Codelco’s VP of marketing, said at the LME annual meeting held this month.

Adding to this scenario is the accumulation of copper cathodes in the United States as a precautionary measure against market volatility, which takes copper out of circulation.

According to the consultancy Wood Mackenzie, global copper demand will increase by 24% between 2025 and 2035 to reach 42.7Mt annually, causing a deficit that could become an obstacle to global economic growth.

Operational risk has become the industry’s primary concern, on the verge of a challenging 2026.

“There is a lower growth outlook for China, which will mean weaker demand for metals, so it will be crucial to capitalize on the demand from the energy transition markets, such as artificial intelligence, data centers, infrastructure, and electrification”, Barbara Mattos, vice president of corporate finance at Moody’s Investor Service, told BNamericas.

In a restricted market, only those with very clear plans and who understand the value of copper “as a strategic asset within geopolitics will be able to turn this reality into an opportunity,” she added.